The rate of Bitcoin has reduced to the rate at which a new coin is created. The bitcoin halving appears in every 4 years. The first started in November, 2012. And this is the third halving since created (2009) and the second was in July 2016. The expected halving will take place in May 2024.The digital currency relies miners (who run software that races to solve complex math puzzles in return for Bitcoins).
The recent reduction in mining rewards unlocked a “block” which was cut from 12.5 new coins to 6.25 per block. This led to reduction of bonus to miners. And due to its straight half reduction many mining firms have switched off their machines as it didn’t continued to give them profits.
‘Miners who make up between 15% to 30% of the entire BTC network hash rate are already in the process of shutting down as profit margins come under pressure’ affirms Alejandro De La Torre, VP at mining pool Poolin. He also concluded, those companies operating inefficient “old generation” mining rigs, such as Bitmain’s S9 miner, on higher electricity costs, will be most affected.
When hedge fund manager Paul Tudor Jones supported the crypto currency as a safeguard against inflation then the digital currency increased more than 20% since the start of this year, touching $10,000 last week. Nonetheless, according to some investors, halving could make the crypto currency less important to miners.